Dominique Lecocq, Lecocq Associate, Geneva, Switzerland

lecocqassociate 

banking & corporate finance law firm 

www.lecocqassociate.com 

SWITZERLAND - RUBIK 

Fight to Maintain Banking Secrecy – New Tax Clearance System 

United Kingdom – Germany – Austria – withholding treaties with 

Switzerland 

New- York Conference - 21 May 2012 – Dominique Lecocq



Outline: 

1. Context – Financial Crisis – Many Countries Target Banking Secrecy 

2. Objectives of the Rubik System 

3. Jurisdictions Involved (so far…) 

4. Persons Targeted by Rubik 

5. Cleaning the Past 

6. Helping the Future 

New- York Conference - 21 May 2012 – Dominique Lecocq 

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1. Context – Financial Crisis – Many Countries Target 

Banking Secrecy 

• 1980 – 2007 : 25 years of Swiss fast growing banking sector; new accounts opening and 

fresh money deposits in Switzerland grows fast. Many new Clients. 

• Switzerland becomes the largest player in custody of private wealth (and still is). 

• Tax Evasion is not a crime in Switzerland – as such does not enter into Anti-Money 

Laundering Definition. 

• Swiss banks have no duty to verifiy whether assets have been properly reported to tax 

administration by clients. 

• Some banks may have over-marketed the Swiss banking secrecy as a haven to avoid 

reporting tax. 

• Confidentiality and data protection are a key concept in Switzerland since a century. 

• Swiss Banking Secrecy is originally only aimed a protecting privacy, not at committing crime 

or eluding tax. 

• 2008 -------- > Financial crisis in the US, EU and many other key jurisdictions. 


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• Some UBS Bankers have played the fool in the US. 

• Many EU Countries suffer drastic deficits. 

• Banking system is about to collapse. 

• US and EU must inject serious funds they may not have in the economy. 

• Greece does not help. 

• Fight against tax evasion. 

• Switzerland is targeted by the US and EU Commission. 

• Switzerland is temporarily black/grey-listed by the OECD. 

• Switzerland realizes that it has a very strong economy, strong currency, low unemployment 

rate (at 2,7%), ranks n°1 of the competitiveness held by the Wolrd Economic Forum and has 

nothing to gain at becoming a tax haven for unreported money. 


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• 2009: Swiss banking association and political parties confirm: 

– Switzerland will not drop its banking secrecy, as confidentiality is a key feature of the 

Swiss culture; 

– Switzerland will not accept an automatic exchange of information (as is requested by the 

EU); 

– Swiss banks do not aim at favorizing tax evasion. 

• 2009 (still): Swiss Federal Counsil takes two steps: 

– Modify the Double Tax Treaties and waive its exemption: tax evasion may now give rise 

to mutual assistance under very stringent conditions (no fishing expedition allowed); 

– The Rubik system is being elaborated. 

• 2010: Switzerland starts negotiating RUBIK with Germany and the UK. 

• 2011: Many drafts circulate betwen Switzerland and Germany/UK as well as the EU 

Commission. RUBIK Agreements with UK was signed in October 2011 and with Germany in 

Septermber 2011. 


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• March 2012: Both agreements have to be updated due to comments by the EU Commission. 

• April 2012: Switzerland signed a RUBIK agreement with Austria («AU»). 

• Early 2013: Entry into force of the RUBIK agreements if the respective parliaments ratify the 

same. 

• Switzerland is ready to negotiate similar agreements with other countries. 


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2. Objectives of the RUBIK System 

The Objectives are straight forward: 

• To Preserve the Banking Secrecy; 

• To Clean the Past with a one-stop payment while preserving the identity of clients; 

• To Ensure Confidentiality and Appropriate Taxation of the Funds deposited in Swizerland by 

a tax at source levied by Swiss banks, acting as paying agents; 

• Swiss perspective: RUBIK protects the privacy of bank clients and ensures the 

enforcememebt of tax collection; 

• Withholding tax is preferable to automatic exchange of bank data; 

• Switzerland forwards the tax owed directly to the country concerned. 

With an aim also: 

• To ring fence the competitiveness of Swizerland. 

• To simplify market access for Swiss financial institutions in counterparties. 

• To ensure a clean financial place. 


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• Mechanism of cooperation 

• Past: Rectify the past 

• Future: Withholding tax 

Definition: the Future withholding tax is a tax levied at source at a flat rate by a paying agent and passed on 

anonymously to the Federal Tax Administration («FTA»). 

• Advanced deposit paid by Swiss banks (except AU). 

• Control mechanism. 

• Guarantees obtained by Switzerlabnd 

• Tax evasion/crime shall not be subject to any penalty/proceedings/criminal charges by 

Germany, the UK and Austria if the provision of the Rubik Agreements are applied properly. 

• Germany, the UK, and Austria commit to avoid using stolen data (as they have done so far) 

and to refrain using data transmitted to them for any other purpose than the Rubik system. 


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3. Jurisditcions Involved (so far…) 

• Germany 

• United Kingdom 

• Austria 

But, Belgium, Luxembourg, Spain, Greece might be willing to enter into a similar deal. 


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4. Persons targeted by Rubik 

• Paying Agents: 

– Banks; 

– Security dealers and /or; 

– Any physical and legal person domiciled or established in Switzerland, partnerships and permanent 

establishements of foreign companies , who regularly, accept, hold, invest or transfer assets for clients, 

pay revenue or assign these revenues, as part of their activity. 

• Clients: 

– Individuals who hold assets in a Swiss bank; 

– Individuals who hold indirectly assets in Swiss banks, through: 

– A domiciliary company; 

– An insurance company, in relation to an insurance wrapper which has as its premier aim the placement 

of assets and not the covering of a specific risk; 

– Another individual (nominee) 

=> Who are domiciled in the UK/Germany and have held an account from 31 December 2010 until 

31 May 2011 (for the UK) or the date of entry into force of the Rubik Agreement with 

Germany. 


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5. Cleaning the Past 

• Two ways – one exit: 

• Rubik offers to German, British and Austrian clients two possibilites to rectify their Swiss banking relations 

with their tax administration: 

– First option: Taxation - Tax lump Sum 

Client 

decides to 

remain 

anonymous 

Bank 

calculates 

and collects 

fixed tax 

Bank pays 

tax to FTA 

FTA pays 

tax to the 

respective 

country 

= Past has 

Cleaned-up 

– Second option: Voluntary Report 

Client 

decides 

disclosure 

through 

bank 

Written 

statement 

to the bank 

Bank 

communica 

tes assets 

to FTA 

FTA 

announces 

to the 

respective 

country 

= Past has 

Cleaned-up 


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• Exit – Closure of Account in Switzerlad 

• Switzerland will alow closure of acounts, but will deliver statitics re the countries of 

immigration. 

• Past not cleaned-up. 


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Payment of a Lump Sum Disclosure Through Bank Close all Swiss accounts 

Confidentiality of clients data is 

preserved 

The tax is calculated based on 

complex formula defined in RUBIK 

Client requests bank to disclose 

Bank communicates information to 

FTA 

Client may decide to close all Swiss 

accounts 

End of December 2012 for Germany; 

End of May 2013 for the United 

Kingdom 

21%-41% effective tax rate for 

Germany and UK 

15%-38% for Austria 

Payment of the lump sum 

extinguished tax claims 

« specific immunity clause» 

GE tax= Income, turnover, wealth, 

successions and 

donations 

UK tax= Income, wealth, succession 

and VAT 

AU tax= Income, profits, succession 

and donations 

Client receives confirmation that 

information was disclosed 

Voluntary disclosure through bank 

considered as spontaneous 

denunciation 

«specific immunity clause» 

Information delivered to FTA: 

•Identity (name/birthday and 

domicile. 

•Taxpayer number, if known 

•Name/address of bank 

•Client n°, account n°, IBAN 

•Account balance as at 31.12 of each 

year starting from 2002 until 2012. 

Client is requested to make a choice 

for each account held by Bank – If 

client does not take any steps – the 

bank will proceed with the Lump Sum 

Taxation 

If at expiry date, not sufficient 

balance in the account, client will 

benefit 8 weeks to inject sufficient 

liquidity. 

If not, he will be subject to voluntary 

reporting. 

New- York Conference - 21 May 2012 – Dominique Lecocq 13



6. Helping the Future - Tax 

• Two ways: 

• Same process as for the cleaning process. If the client refuses, he/she cannot open/maintain a bank 

account in Switzerland. 

– First option: Withholding Tax – Confidentiality Preserved. 

Payment of 

withholding 

tax 

Bank 

collects tax 

Bank pays 

tax to FTA 

FTA pays 

tax to the 

respective 

country 

= Tax conforimity 

– Second option: Disclosed Accounts 

Voluntary 

disclosure 

Written 

statement 

to the bank 

Bank 

communica 

tes assets 

to FTA 

FTA 

announces 

to the 

respective 

country 

= Tax confomity 


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• Banks will be a payng agent to the foreign tax authorities. They will train their employees on 

foreign tax legislation. The implementation of the system will be monitoried by the Swiss 

autorities and auditing firms. 

• What rate will apply (summary): 

• Germany: flat rate of = 26,375%, corresponding to the tax rate applicable in Germany, 

25% + 1.375% of solidarity tax. GE succession rate will be = 50% 

• UK does not apply a flat tax rate. UK tax rate between 28% et 48 % corresponding to the 

category of assets/revenue. UK succession tax rate = 40% 

• Austria flat tax rate = 25%, corresponding to category of return on equity. Austria does not 

levy tax on succession. 

• Swiss banks will pay an advanced deposit on the future tax revenues. 

o 2 billions to GE 

o 500 million to UK 

o No advanced deposit for AU 


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7. Thank You 

KEY CONTACT 

Please contact Dominique Lecocq for any questions at 

drl@lecocqassociate.com or +41 22 707 93 33 

lecocqassociate is a boutique law firm with offices in Switzerland, Malta, the Emirates, and a desk 

in Italy, specialized in selected few niche practice areas, including regulatory banking, 

collective investments, corporate finance, regulatory insurance, islamic finance and private 

equity. 

www.lecocqassociate.com 

Disclaimer: The information contained herein is for informational purposes only and is not meant 

to serve and should not be relied upon as professional advice. Further information on the 

subject matter of this publication may be obtained from lecocqassociate. 


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Dominique Lecocq, Lecocq Associate, Geneva, Switzerland

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